The Supreme Court on Wednesday held that the purpose for which an acquisition is made is also a relevant factor in determining the market value of the land, allowing an appeal seeking enhancement of compensation for a plot acquired for excavation of coal.
“…when the acquisition is solely for the purpose of excavation of coal and the entire land is acquired on the basis of the estimates of the coal reserve identified and the entire land is to be mined and used and no further developmental activity is required, we are of the opinion that in the facts and circumstances of the case, the High Court has erred in deducting 1/3rd towards the developmental activities…”, held a division bench of Justices MR Shah and Krishna Murari.
In the impugned judgment, the top court found that while determining and awarding the compensation at Rs 80,000 per acre, the High Court had considered the market value of the land in question at Rs 1,23,000. The deduction was made on account of developmental activities.
“Since the entire land is to be mined and the coal is to be excavated, there is no wastage of land on account of any developmental activities such as roads, sewage lines, parks etc. In that view of the matter, there is no development required and therefore 1/3rd deduction is not warranted at all,” the Supreme Court held.
While allowing the appeal filed by the original landowners, the top court ordered that the original claimants shall be entitled to the compensation for the lands acquired at Rs 1,23,000 per acre, with other statutory benefits which may be available under the provisions of the Land Acquisition Act, 1894.
“In addition, the original claimants shall also be entitled to Rs10,000 per acre as awarded by the High Court on account of coal deposits,” the order clarified.
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